Cheryl wrote:

- quote -

The "solo 401k" is a marketing term derived from the fact
that when the law changed it actually finally "made sense"
to do a one person 401(k). That said, such plans are merely
401(k) plans, virtually like any other.

However, there is one caveat--because they are specifically
designed by the authors of the plan document to be used in
cases where there is only a single participant, you likely
can't make use of one of those plans in a partnership
setting. That's not a law problem, but rather a drafting
issue with the plans--a plan with multiple participants has
to deal with issues like accounting for the separate
accounts.

However, it should be relatively simple to get a "regular"
401(k) plan in that case. If all participants are "highly
compensated" under the law (which will generally mean a
greater than 5% ownership interest) then the plan will be
fairly simple to administer.

--
Ed Zollars, CPA
Phoenix, Arizona

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My husband, myself, another gentleman and his girlfriend are
all members in an LLC taxed as a p'ship. We are the only
members. We have no employees. We want to set up a
retirement plan. I've looked at a few and like the new sole
410K. From what I've said, are we eligible?

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